The Italian government is stepping up measures aimed at quelling market concerns about the sustainability of the country’s debt. Following requests by European politicians, the Berlusconi administration presented a letter of intent to the 26 October Euro Summit, showing its commitment to implement budget cuts and growth-enhancing reforms. The plan includes changes in labour market regulations, making layoffs easier and increasing the retirement age to 67 years - a measure which proved to be controversial even among members of the ruling coalition. In fact, tensions among the governing coalition do not augur well for the government’s ability to implement the announced reforms.
